LDD says the investment will deliver a comprehensive modernization of the plant, together with new manufacturing capability and a more efficient route to market.
The changes will result in the loss of 30 jobs.
A planned sale of surplus land assets will fund the work at the Bentley site, with improvements to include the construction of a new Western Australian Distribution Centre.
Plans to improve efficiency
One way packaging technology will be introduced, as well as a new filling line, to expand manufacturing capacity in milk-based beverages and enhance efficiency.
LDD says that there will be a ‘significant upgrade of buildings and amenities.’
Road infrastructure will include new internal roads and a new exit to enhance driver safety and reduce vehicle traffic in adjacent residential areas.
LDD also plans to improve the efficiency and flexibility of its logistics and distribution arrangements. In particular, the business will consolidate its existing multiple depot footprint to a single new depot on site at Bentley.
Outsourcing means job cuts
As part of this decision, LDD will outsource its warehouse operations to Linfox. Due to this consolidation, all roles within the Logistics function at Bentley will be cut.
LDD managing director, Peter West said: “This transformational investment makes clear LDD’s intent to compete and grow our dairy business in Western Australia over the long term.
“Any decision that results in job losses is taken extremely seriously. Today’s announcement is about ensuring we remain a sustainable and viable operator in the Western Australian dairy market today and in the future.
“Our people are our primary concern right now and we are focused on supporting them and their families through this process,” he added.
Investments already made
The investment comes on top of $1m (A$1.5m) LDD has invested in the site in the past 12 months.
“This significant investment highlights our belief in the dairy industry in Western Australia and the focused approach we are taking to this market, consistent with our turnaround plans,” West said.
“We will continue to target the high-value milk based beverage category, white milk and other key dairy categories, where we believe we can sustain profitability and category growth over the long term for the benefit of our business, farmers, customers, distributors and other stakeholders.”